A Los Angeles Superior Court jury has concluded that Massachusetts Mutual Life Insurance Co. did not improperly withhold dividends from a class of hundreds of term life insurance policyholders.
The jury found that the participating 20-year term life insurance, or T20G policies, bought by hundreds of people from 2000 to 2004 in the Los Angeles area never generated enough profit to warrant dividends under the policy agreements. Jurors concluded that the plaintiffs failed to prove that the policies generated profits.
According to the lawsuit filed by Christina Chavez in April 2010, the insurer was required to determine those policies' contributions to the company's excess profits, or "divisible surplus," and return policyholders' fair share in a dividend each year.
During closing arguments, the plaintiff attorney claimed that the company dodged its duties by refusing to do the math and determine if the T20G policies were entitled to dividends each year, asserting that MassMutual actually owed the class $717,000 in dividends.
